Nationwide 2.5% Regular Saver ISA

Nath4n

As reported on This is Money this morning:

http://www.thisismoney.co.uk/money/saving/article-2595872/Nationwide-launches-regular-saver-Isa-2-5-rate.html

On Sunday Nationwide will be launching a new 12 month Regular Saver ISA paying 2.5% with a maximum monthly deposit of £1250. It seems this account should automatically benefit from the increased cash limit to £15k in July meaning by the end of the year you should be able to stash away the entire £15k available.

At the end of the 12 months it will transfer into a standard Nationwide easy access ISA (currently paying 1.5%) or transferred elsewhere obviously.

Chorlie

Can some clever maths bod workout if it's better if you had a spare £15,000 to place it in this new Nationwide ISA or put the maximum in a Nationwide 1.5% ISA in April and adding the remaining come July.

I'd guess it would depend on what interest your getting on the remaining before getting into whichever ISA.

(This is putting a side that you might be able to get a higher interest somewhere other than Nationwide).

innovate

The max you can put into it is £1,250 a month. If you have a spare £15K now, you can put it all into current accounts that pay 3, 4 and 5% and then dripfeed the nationwide ISA.

If you have substantially less than £15K, say only £9K, there is not much point to look at a cash ISA until next March because the current accounts outperform the ISA even for higher rate tax payers.

Nath4n

According to the article you'd get £211 over the course of the year by saving £1250 each month, vs £225 by putting a straight £15k into a 1.5% ISA.

My personal plan is to drip feed this from my Santander 123 (which essentially pays 2.4% after tax) and to hopefully keep the Santander 123 topped up along the way. This will ensure roughly 2.4-2.5% on my money across the entire year and then ideally find a nice new home for the full £15k NISA this time next year.

Gordon_the_Moron

innovate wrote: »

The max you can put into it is £1,250 a month. If you have a spare £15K now, you can put it all into current accounts that pay 3, 4 and 5% and then dripfeed the nationwide ISA.

If you have substantially less than £15K, say only £9K, there is not much point to look at a cash ISA until next March because the current accounts outperform the ISA even for higher rate tax payers.

Worth keeping an eye in case a miracle happens and a good deal comes out that isn't a regular saver at the beginning of the new tax year, if that happens even for people with little to put in it would be worth opening with the minimum deposit just so they have the account.

le_loup

Anyone got any idea about the T&Cs on this, specifically, if the monthly deposit is fixed at the outset?
My thought is, a large amount to start the thing off - 9 - 12 months interest - then trail off if a better longer fix opportunity presents itself.

jase1

Nath4n wrote: »

My personal plan is to drip feed this from my Santander 123 (which essentially pays 2.4% after tax) and to hopefully keep the Santander 123 topped up along the way. This will ensure roughly 2.4-2.5% on my money across the entire year and then ideally find a nice new home for the full £15k NISA this time next year.

Likewise. I'm getting close to maxing out my Santander account, and my extra savings per month are pretty much exactly the same as the limit of this account, so assuming nothing better comes along this account looks pretty much tailor-made for my circumstances.

Archi_Bald

There are better regular savers about if it doesn't have to be an ISA. You can get £1,350 a month into 4 and 6% accounts, and another £500 (soon £1,250) at 3%. For non-tax payers (with R85s), this obviously beats any ISA, and basic rate tax payers and even higher rate tax payers also make more than in an ISA.

FD - 6% £300/mth
KRBS - 4% £400/mth
HSBC - 4% £250/mth
Club Lloyds - 4% £400/mth

The 2.5% ISA, fully funded with £1,250 each month, would yield £202.36.

Making best use of the above with the same £15K, a BR tax payer would get £289.58 and a higher rate tax payer £217.48.

Verify my numbers: http://forums.moneysavingexpert.com/newreply.php?do=newreply&noquote=1&p=65165501

There is also Newcastle BS - 3% £500/mth. EDIT: rumour has it this will shortly go up to £1,250.

KTF

An interesting part from their press release:

From 1 March 2015, the maximum monthly deposit limit will be removed, allowing customers who have not fully utilised their full annual ISA allowance to top-up to the maximum of £15,000.

Source: http://www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2014/4/02-april-new-regular-saver-isa

So you could open one on Sunday and feed it £1 a month whilst the cash swirls around the high interest current accounts, regular savers, etc then throw it all in the ISA in March so you dont lose your allowance?

Archi_Bald

Super spot, sounds exactly as you say.

KTF

Given the lack of ISA with decent rates at the moment, thats my current plan as it seems to be the best of both options.

Should providers throw something interesting when the allowance increases then I can always re-evaluate it but at the moment it looks like there are going to be no surprises on Sunday.